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3/5/2004
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Best Of Listening Post

Long after predictions that E-commerce will bury conventional commerce became quaint, tempers still flare over the justification for an Internet sales tax

A Boston IP Party Brewing?
Your stand on Internet sales taxes can make you an anarchist, a patriot, a traitor, or even someone who contributes to delinquency. Perhaps the politics of 2004 are getting raw early, but people posting in the Listening Post see even online sales taxes through a "love America or leave it" filter. The debate is going on in a forum called "Sales tax on retail Internet purchases".

"Charley Roberts" opens the discussion thoughtfully enough. "Sales taxes are an important source of revenue needed to support local- and state-government services. Brick-and-mortar retailers collect those taxes and forward them to taxation authorities.

"It seems inequitable to afford Internet retailers preferential treatment that enables them to offer goods at reduced cost and also to allow consumers to avoid paying their fair share for services provided by state and local government. The argument that Internet-based businesses couldn't manage the task of collecting and forwarding taxes and still make a decent profit just doesn't hold water."

An excitable "Paul Rivers" fires back: "I seem to recall that there is a little document called the Constitution [you know it's going to be good when someone opens the can of irony from the get-go] that forbids states from levying taxes on goods or services from other states. That could be considered a hindrance to interstate commerce." We have our constitutional-law attorneys checking that claim.

Paul goes on to say that an Internet sales tax would be a hindrance to online commerce. "But, [why let] a few laws get in the way of a good [scheme for] stealing from citizens? BTW, since [online purchases] average only a few dollars, my state, North Carolina, decided to be real nice and just say if you can't prove what you bought, just estimate. If you want us to, we'll do it for you. Roughly about $35 per person. Don't like it? Too bad. The concept of an Internet tax sickens me."

"Smoker" declares: "Paying taxes is contributing to the delinquency of a once-good government. Do we need to pay [for] 5 million land mines a year, $88 hammers, study the effects of alcohol on fish, etc.? There's a zillion examples of money wasted, and paying more taxes only creates more of that. We don't have a good government; we have a lucky one, and one that treats its citizens poorly."

"Aaron Swanson" didn't like Smoker's tone. "It always surprises me to see the negative comments about our country or government. If you don't like it you can always leave. [Because voting obviously doesn't work.] Why not make Internet taxes (if applied at all) federal taxes?"

Meanwhile, we've called off our lawyers. "Kelvin Smith" informs us that it's "not unconstitutional for state sales taxes to be imposed on interstate commerce. It is, however, impermissible for a state to impose them unilaterally on a business that has no in-state presence."

Says Kelvin, "It isn't reasonable to expect Joe's Deli in Queens, N.Y., to know that a gourmet candy bar is taxable at one rate in Los Angeles, another in Fresno, only taxable if it's below a certain size in Chicago, and not at all in Seattle."

The larger issue, Kelvin says, is that it's "unfair" to "allow people who buy goods one way to avoid paying taxes that their neighbor, buying at a local store, pays. And don't tell me it balances out [with] shipping. Don't people realize that part of the reason local stores charge more is that they've paid for shipping the goods there?"

Besides, he says, "taxes aren't theft, and to call them that is anarchistic. They are the cost of living in a civilized society, the method by which we pay for everything from national defense to pothole repair." Don't be shy, but do be civil in the Listening Post, informationweek.com/LP.

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